Bank Indonesia (BI) is undergoing an aggressive easing cycle in support of President Joko “Jokowi” Widodo’s focus on jacking up domestic consumption to boost the country’s record-slow economic growth.
The central bank delivered a surprise cut of 25 basis points (bps) to its policy rate on Thursday, taking it to 5.5 percent after trimming it a quarter of a point last month. Only 13 of the 34 economists surveyed by Bloomberg projected the move.
The step follows those of global central banks that almost simultaneously cut policy rates to help anchor their slowing economies.
“The policy is consistent with low inflation projected below the midpoint of the target corridor, attractive returns on domestic financial investment assets that supports external stability, as well as a preemptive measure to safeguard the momentum of economic growth moving for...